Motorola lawsuit alleges Huawei stole trade secrets

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Motorola (NYSE:MOT) sued Huawei, alleging that former Motorola employees provided the Chinese equipment vendor with trade secrets about its technology.

In an amended complaint filed last week in U.S. District Court for the Northern District of Illinois, Motorola alleged that over a period of years former employees gave Huawei detailed information about its network architecture technology, including its "seamless mobility" solution. Seamless mobility was an end-to-end system that, according to a 2005 Motorola document, brought together "subscriber devices, access network technologies, a core network that leverages broadband IP switching capabilities, business support and network management systems and comprehensive network services that ensure cost effective planning, deployment and secure operations."

Motorola previously sued the employees in 2008 as well as Lemko, a wireless technology company where several of the employees worked after leaving Motorola.

In a statement, Huawei said the lawsuit had no merit. "Huawei, which has an agreement with Motorola allowing that company to resell Huawei's wireless equipment, has only recently learned of the amended Motorola complaint," the company said in a statement. "Based on our review of the complaint so far, the complaint is groundless and utterly without merit. Huawei has no relationship with Lemko, other than a reseller agreement. Huawei will vigorously defend itself against baseless allegations. Moreover, as an active and significant player in global standards-setting bodies, Huawei has great respect for the rights of intellectual property holders, and will with equal vigor protect its own hard-earned intellectual property rights."

According to the complaint, Motorola said that one of the former employees, Shaowei Pan, worked directly with the founder and chairman of Huawei, Ren Zhengfei. Huawei began receiving secrets as early as 2001, the complaint said. Motorola said Pan was with Motorola for about 10 years until April 2004, before becoming CTO of Lemko.

Faye Vorick, vice president of marketing for Lemko and a defendant in the case, strongly denied the allegations in the complaint. "The documents are a pack of lies," she told FierceWireless. "They're ridiculous and false. It is a case of a big company trying to harass a small company." She said that she could not comment further on pending litigation.

Vorick is accused of "playing a key role as the 'front' person for Lemko's wrongful activities." A Motorola spokeswoman, Jennifer Erickson, told FierceWireless that the company does not comment on pending litigation, "but will continue to vigorously defend our IP (intellectual property)."

Lemko makes equipment that it has termed "distributed mobile architecture." The company's approach is to hollow out the network core and put all of the switching, routing and gateway equipment at the edge of the network.

The disclosure of the lawsuit comes just days after Nokia Siemens Networks agreed to buy Motorola's wireless networks business for $1.2 billion. Huawei had been mentioned in the past as a potential buyer for the unit.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this FT article
- see this Motorola document

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Article updated July 22 with comments from Motorola and Huawei.